Foreign air crew plans take flight

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Qantas faces union criticism for its plans to sidestep a
cap on overseas-based cabin staff.

Qantas is looking to bypass a recent agreement that caps the
number of its foreign-based cabin crews by hiring lower-paid Asian
staff on its low-cost international subsidiary, Australian
Airlines.

Just three months after avoiding industrial action from its 4000
international flight attendants over plans to establish a London
crew base, Australian Airlines has told the Flight Attendants
Association of Australia it wants unrestricted access to foreign
labour.

With pay negotiations between the Qantas subsidiary and the
union breaking down last month, the secretary of the FAAA's
international division, Michael Mijatov, said: "What they are
saying to us is that they don't want any restriction at all."

The move is the latest low in relations between Qantas and the
union since the airline secretly trained hundreds of flight
attendants as potential strikebreakers last year.

Tensions appeared to be easing when the union agreed to Qantas'
plans for the London base by lifting the cap of foreign-based crews
from 370 to 870 last November.

Qantas expects to save $18 million a year - mainly from reduced
hotel and meal bills - when it sets up the 400-strong London base
next week.

Australian Airlines is not bound by the cap as it is considered
a separate airline from Qantas.

When asked about plans to source flight attendants in Asia, a
Qantas spokesman said: "There are no immediate plans to change the
way Australian Airlines operates. However, to ensure the long-term
viability of Australian Airlines, there cannot be restrictions
placed on the airline's growth."

Australian Airlines has not specified the countries in which it
wants to establish crew bases. It is also not clear if Qantas'
comments last week about the airline exploring new market
opportunities in China, India, Thailand and Vietnam relate to
setting up crew bases.

What they are saying to us is that they don't want any restriction at all." Michael Mijatov, FAAA

The FAAA is also resisting moves by the airline to force its
flight crews to fly longer sectors without a substantial pay rise.
The union says Australian Airlines crews are paid 40 per cent lower
per hour than Qantas staff. Qantas says the airline's cost base is
25 to 30 per cent lower.

Fears of more Qantas jobs going overseas were fuelled last week
when chief executive Geoff Dixon said the airline needed to find
"more efficiencies by putting more jobs offshore".

Despite Qantas cementing its reputation as the world's most
profitable airline with a 28 per cent rise in half-year profits to
$458.4 million, Mr Dixon said the airline was competitively
constrained by having 95 per cent of its heavily unionised 35,000
employees based in Australia.

Mr Dixon will meet unions in Sydney this morning and is expected
to be questioned about plans to move jobs offshore.

While Mr Dixon played down reports last week that the airline
wants to move about 7000 jobs offshore, he said: "If we want to be
like more of our competitors, they probably have 70 per cent of
their people in their home countries."

As part of its three-year program to cut $1.5 billion from
costs, Qantas expects to save $486 million from improved "labour
productivity" by mid-2006.